• J1 and J2 Management and administration expenses

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Did the SMSF incur management or administration expenses?

    No

    Leave J1 and J2 blank. Go to U1 and U2.

    Yes

    Read on.

    Write at J1 and J2, as required, the amount of management and administration expenses (of a revenue nature) that the SMSF incurred in 2014–15.

    Do not include at J1 or J2:

    • investment management expenses (include these at I1 or I2 Investment expenses)
    • SMSF auditor fees (include these at H1 or H2 SMSF auditor fees).

    Deductible management and administration expenses

    Write at J1 the amount of deductible management and administration expenses.

    The SMSF can claim a deduction for management and administration expenses incurred:

    • for the purposes of earning assessable income      
      • such as the cost of collecting contributions (Australian SMSFs can claim a deduction whether or not the contribution is assessable, foreign SMSFs cannot claim a deduction)
       
    • that were tax-related (as described in section 25-5 of the ITAA 1997), such as        

    Do not include at J1 management and administration expenses (or any part of such expenses) that relate to earning:

    If the SMSF pays an income stream (pension) to a member, refer to How are expenses treated when an SMSF has ECPI? before you claim a deduction for the SMSF's management and administration expenses.

    Non-deductible management and administration expenses

    Write at J2 the amount of management and administration expenses that are not deductible.

    Non-deductible management and administration expenses include:

    • fees for setting up the SMSF
    • legal fees incurred to amend a trust deed to include a new member
    • late lodgment penalties
    • expenses incurred in earning income that is exempt, such as exempt current pension income.

    Example: Management and administration expenses

    SMSF J has no exempt current pension income, foreign income or non-arm's-length income.

    In 2014–15, SMSF J paid the following management and administration expenses:

    • $600 for tax agent fees
    • $388 for the SMSF supervisory levy
    • $1,000 to an SMSF administrator
    • $800 to change its trust deed.

    SMSF J determines that:

    • the tax agent's fees, SMSF supervisory levy and SMSF administrator fees ($1,988) are deductible
    • the legal fees for the change to the trust deed ($800) are not deductible.

    SMSF J reports:

    H1 Deductible management and administration expenses $1,988

    H2 Non-deductible management and administration expenses $ 800

    End of example
    Last modified: 15 Jan 2016QC 44344